Weaker version of Isett's tax bill wins House nod

Despite many compromises, Lubbock legislator satisfied

Published: Wednesday, April 27, 2005

ELLIOTT BLACKBURNFOR THE AVALANCHE-JOURNAL

The Texas House of Representatives ended three weeks of debate Tuesday afternoon, approving a bill that lowers the amount city and county governments may increase spending without seeking voter approval.

The "Truth in Taxation" legislation, filed by Rep. Carl Isett, R-Lubbock, was amended 19 times and targeted for numerous procedural objections.

The language approved Tuesday was weaker than the bill Isett filed in February, but all compromises met the needs of his fellow representatives while lowering two barriers to voter participation in the tax rate process, Isett said.

Carl Isett

"Every issue they brought forward we addressed in a way that made sense, that was constitutional, but still, at the end of the day, gave the taxpayers the protection from tax increases through appraisal creep and brings transparency to the process," Isett said.

The legislation allows voters to petition their local governments to hold back tax increases if elected officials seek a more than 5 percent increase over spending in the preceding year, up from an originally proposed 3-percent increase limit.

Taxes can increase if property is appraised at a higher value than the previous year and elected officials make no change to the tax rate. Voters today can petition officials to hold increases to 8 percent.

"We require now that if local governments take any more money than they did last year, if taxes go up from one year to the next, then they have to hold public hearings and have a public vote upon doing that and explain to us why it is that they're taking more money from us," Isett said.

The bill only applies to governments that raise more than $5 million in maintenance and operations revenue. If the rate of inflation is higher than 5 percent, the entities can increase spending up to 8 percent before triggering an election, and money spent on unfunded state mandates is exempted.

Rep. Fred Hill, R-Richardson, said during Tuesday's debate that the bill was a purely political measure on "probably the most important policy issue that we deal with."

Hill and Mike Villarreal, D-San Antonio, were the bill's most vocal opponents on the House floor.

"This bill is a fast poison to the cities and the counties of this state," Hill said.

City and county associations fought the bill, fearing the new rollback standards would curtail local government's ability to provide basic services.

The Texas Municipal League, which represents municipal governments, was unsure what to make of the version passed Tuesday afternoon, executive director Frank Sturzl said.

"It's been watered down an awful lot," Sturzl said. "I just don't know that it does a lot now."

School finance, not cities, was the real reason for property tax increases, and legislators should fix that instead of targeting cities and counties, Sturzl said.

Isett filed his "Truth in Taxation" bill in two preceding legislative sessions. The legislation was delayed twice this session - first on a technical error and then after the House approved an amendment that granted the exceptions to the 5 percent limit.

Isett credited support from Gov. Rick Perry and House Speaker Tom Craddick, as well as city of Lubbock officials, for the bill's passage.

Perry called for a similar system during his State of the State address this year, and hailed the "aye" vote on HB 1006 in a statement issued Tuesday.

"Passage of the Truth in Taxation initiative is a major victory for Texas taxpayers," Perry said. "Instead of being stuck in the passenger's seat, taxpayers will finally have their foot on the brake when government grows too fast."

The issue must now be taken up by the Senate. Senators Tommy Williams, R-The Woodlands, and Kyle Janek, R-Houston, authored SB 18, which is similar to Isett's legislation.

The Senate bill removes the petition step of the rollback election process, sending tax rate increases more than 3 percent higher than the previous year directly to voters. It also requires that the governing body hold two public hearings on the increase.

The bill moved out of committee last week but had not been scheduled for debate as of Tuesday.